Key Takeaways
Bitcoin’s Coinbase premium index is negative, indicating selling pressure from US investors. US Bitcoin ETFs saw negative flows for two days, but BlackRock’s IBIT fund logged $59 million in inflows. Bitcoin’s Coinbase premium index flips negative, as US traders brace for this morning’s January CPI release, according to Coinglass data. The most recent negative reading on the index occurred on February 3 when Bitcoin’s value bottomed out at $92,000 following President Trump’s announcement of tariffs on imports from Canada, Mexico, and China, which stoked inflation fears. The premium index tracks the spread between Bitcoin’s dollar-denominated price on Coinbase and the tether-denominated price on Binance. When it is negative, Bitcoin is trading at a higher rate on Binance than on Coinbase, indicating selling pressure from US retail investors since Coinbase serves as one of their go-to crypto platforms. Bitcoin briefly dipped below $95,000 on Tuesday afternoon before recovering. Overnight, prices fluctuated between $95,000 and $96,000. At press time, BTC was trading around $95,800, down 2% over the past 24 hours, per CoinGecko data. Offshore traders also led the price recovery from overnight lows near $94,900 to $96,000 according to the premium indicator. The negative Coinbase premium is consistent with the trend of outflows from US spot Bitcoin ETFs, which have now registered two days of net withdrawals, according to Farside Investors data. Over the first two trading days of the week, approximately $243 million was withdrawn from these funds. Despite the negative performance, BlackRock’s IBIT is still on its buying spree, netting around $59 million so far this week. Inflation data are in the spotlight. Economists anticipate January’s CPI to show a headline inflation rate of 2.9%, matching December’s annual increase. Core inflation, excluding food and energy prices, is expected to rise 3.1% year-over-year, potentially marking the lowest level since April 2021. The Federal Reserve maintained the fed funds rate at 4.25%-4.5% during its January 2025 meeting, following three consecutive rate cuts in 2024. According to Chair Powell, the Fed is not in a hurry to lower interest rates and has paused to see further progress on inflation. The Fed seeks to achieve maximum employment and inflation at a rate of 2% over the long run.